International Marketing

Instructor: Dr. Md Razib Alam

BBA & MBA (Dhaka University)
MASc & PhD (University of Waterloo, Canada)
 Overview 7

• Bases for today’s legal systems

• The important factors in jurisdiction of legal
disputes
• The various methods of dispute resolution
• The unique problems of protecting intellectual
property rights internationally
• Cyberlaw
• Commercial law within countries
• U.S. Laws application in host countries
• Export restrictions
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 Global Perspective
• No single, uniform intl.
com. law governing
foreign businesses
– Pay particular attention to the
laws of each country
• Laws governing business
activities within and
between countries
– An integral part of the legal
envt. of intl. business
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• Securing expert legal
advice is a wise decision
• The foundation of a legal
system
– Profoundly affects how the
law is written, interpreted,
and adjudicated
 Bases for Legal Systems 7

• 4 heritages form the • Due process of law may

basis for the majority of vary considerably
the legal systems of the among and within
world these legal systems
– Common law – Even in the same legal
– Civil or code law system, its individual
interpretation may vary
– Islamic law significantly
– Marxist-socialist tenets

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 Lawyers per 100,000 People
in Selected Countries
Exhibit 7.1

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 7
Common Law

• Applies established and

• The basis is tradition,
past practices, and legal
precedents set by the
courts
– Seeks interpretation
through the past decisions
of higher courts
customary law principles to a
similar set of facts
• Not recognized as being all-
inclusive
• Ownership is established by
use
• Derived from English law
• Found in England, USA, and
other countries once under
English influence

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 7
Code Law

• Considered complete as a
result of catch-all
provisions
• Generally divided into
3 separate codes • Ownership is determined
– Commercial by registration
– Civil • Derived from Roman law
– Criminal
• Found in Germany, Japan,
France and in non-Islamic
and non-Marxist countries

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 7
Islamic Law (Cont.)

• The basis for Islamic law

is interpretation of the • It includes issues:
Koran – Property rights
– Covers religious duties and
obligations as well as the – Economic decision
secular aspect of law making
regulating human acts – Types of economic
freedom
– Defines a complete system
that prescribes social and
economic behavior for
individuals

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 7
Islamic Law

• Prohibits the payment of • Emphasize the ethical,

interest moral, social, and
religious dimensions to
• Prohibits investment in enhance equality and
those activities that fairness for the good of
violate the Shari’ah society

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 7
Marxist-Socialist Tenets

• Socialist countries are now

directly involved in trade
with non-Marxist countries
– Needed to develop a commercial
legal system that allows
engagement in intl. commerce
• Pattern for development
varies among countries
– Each has a different background
– Development of market-driven
economies at different stages
• Premise is that law is
strictly subordinate to
prevailing economic
conditions
– Fundamental propositions
as private ownership,
contracts, due process, and
other legal mechanisms
have had to be developed

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 Jurisdiction
in International Legal Disputes
• No judicial body exists to
solve intl. business
problems
– Legal disputes can arise in
3 situations
• Between govts.
• Between a company and a
govt.
• Between two companies
– Look to the legal system of
each party involved
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• Basis of jurisdiction:
– Jurisdictional clauses
included in contracts
– Where a contract was
entered into
– Where the provisions of
the contract were
performed
• Most clear-cut decisions
can be made:
– When contracts include a
jurisdictional clause
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 International Dispute 7
Resolution

• When things go wrong, what • Most intl.

recourse does the intl. marketers prefer a
marketer have? settlement
• The first step in any dispute through
is to try to resolve the issue arbitration rather
informally than by suing a
– If it fails, you should resort to foreign company
more resolute action

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Conciliation
• A nonbinding agreement
between parties where a
third party mediates
differences
– Sessions are private
– All conferences are kept
confidential
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• Although it’s a friendly
route to resolving
disputes
– It is not legally binding
– An arbitration clause
should be included in all
conciliation agreements
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Arbitration

• Conducted under the

• Involves selecting a
disinterested and
informed party as referee
who determines the
merits of the case and
makes a judgment that
both parties agree to
honor • Any formal decision is
auspices of more formal
domestic and intl.
arbitration groups
– Includes clauses specifying
the use of arbitration to
settle disputes
enforceable by law

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Arbitration
• Some arbitration groups
• Requires the agreement
on two counts
– To arbitrate according to the
rules and procedures of
some arbitration tribunal
– To abide by the awards
resulting from the
arbitration
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are:
– Inter-American Commercial
Arbitration Commission
– Canadian-American
Commercial Arbitration
Commission
– London Court of Arbitration
– American Arbitration
Association
– International Chamber of
Commerce
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Litigation

• The best advice is to seek settlement out-of-court

• Deterrents to litigation
– Fear of creating a poor image and damaging public relations
– Fear of unfair treatment in a foreign court
– Difficulty in collecting a judgment that may otherwise have
been collected in a mutually agreed settlement through
arbitration
– The relatively high cost and time required when bringing
legal action
– Loss of confidentiality

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Protection of Intellectual Property Rights
7
– A Special Problem

• Huge spending on R & D to

• Millions of dollars develop products, processes,
spending for designs, and formulas
establishing brand – IPs are the valuable assets a
names firm possesses

– To symbolize quality – Property rights can be legally

protected to prevent other firms
– To design product from infringing on such assets
features to entice
customers • New technologies are
developed to prevent piracy

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Patent, Trademark, and Copyright 7

• Patent– gives an inventor exclusive right to make,

use, and sell an invention for a specified period of
time
• Trademark– is a distinctive mark registered and
used to distinguish a product from competing ones
• Copyright– establishes ownership of a written,
recorded, performed, or filmed creative work
Counterfeiting and Piracy
• Sophisticated piracy
• Widely available across
industries
• Lost sales from unauthorized
use of patents, trademarks,
and copyrights
– Amount to more than $300
billion annually
– More than 2 million lost jobs
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industry has grown
– 2% of the $327 billion
worth of drugs sold each
year
– More than 10 million fake
Swiss timepieces, netting
illegal profits of at least
$500 million per year
– In some African and Latin
American nations, as much
as 60% are counterfeit
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Piracy Rates for Computer Software
Top and Bottom 20
Exhibit 7.2

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 Inadequate Protection 7

• Can lead to the legal loss of

rights in potentially profitable
markets • Many firms fail to
– McDonald’s in Japan legally lost take proper steps
the rights to trademarks and had to legally protect
to buy back these rights or pay their IPs
royalties for their use

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 Prior Use Vs. Registration7

• Prior Use– whoever can establish first use is

typically considered the rightful owner
• Registration– the first to register a trademark or
other IP is considered the rightful owner
– Proving that a firm has used the trademark or brand
name first is not sufficient to establish ownership in
another country
– It is best to protect IP rights through registration
– China has improved its IP rights like ‘first to invent’ is
the owner of IP

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 7
Commercial Law within Countries

• The legal differences between countries can

affect intl. mkt. plans
– Intl. marketer must remain alert to the different
legal systems of each country
– Problems is acute when a common marketing plan
to be implemented in several countries

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 Marketing Laws (Cont.)7

• All countries have laws regulating marketing

activities in 4 Ps
• Discrepancies across markets cause problems
– U.S. does not allow the buying or selling of human
organs
– Some countries only have a few mkt. laws with lax
enforcement
– Others have detailed, complicated rules that are
stringently enforced

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 Marketing Laws7

• Vast differences in enforcement and interpretation of

laws covering the same activities across cultures
– Laws governing sales promotions in the EU offer good
examples of such diversity
– China is experimenting with a variety of laws to control
how foreign firms do business
– Censorship of advertising is a constant concern
– For many U.S. products with markets in Europe, meeting
EU standards is less expensive than designing products
especially for Europe

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 Green Marketing Legislation7

• Green marketing laws

– Focus on environmentally friendly products and
product packaging and its effect on solid waste
management

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